Finding that dream first home and making the decision to purchase can often come with a little anxiety. Don’t stress, because the process doesn’t have to be daunting. If you have a plan of attack, purchasing a property can be an enjoyable process.
Here are 5 buying tips for first home buyers to help you prepare:
1. Start saving!
While most lenders require a deposit of at least 5% of the property’s value, bigger is definitely better. A larger deposit may help you avoid Lenders Mortgage Insurance, which is charged when a home buyer borrows more than 80% of the property’s value.
You’ll also need to budget for additional costs which may include Stamp Duty, mortgage lodgment fees, transfer fees, inspection fees and legal fees.
Doing your research on costs like stamp duty, using available stamp duty calculators, and putting a savings strategy in place early will make it easier to purchase that first home.
2. Know what you want, and tell others
Write down a list of features that a property must have, including number of bedrooms and bathrooms, whether you need a covered garage for your vintage car, a beautiful backyard for your Golden Retriever, or nearness to day care and schools (perhaps a longer-term feature).
Don’t forget to give the list a priority order. Is a sweeping view more important than the covered garage or beautiful backyard? Make sure you know your priorities. Once you know what you’re looking for you can narrow down the list you wish to inspect.
Then, make friends with the local Real Estate Agents and tell them what you want. Tell friends and neighbours too. You might just get the inside running on a home that hasn’t hit the market … yet.
3. Leverage the professionals
A Mortgage Broker can take a lot of stress out of the home buying process. They’ll be able to do a lot of the legwork for you and help you understand the home buying journey. They will also be able to help you choose the right home loan that suits your needs.
Virgin Money has partnered with some of Australia’s leading mortgage brokers who can do the legwork for you. You can use our Find a Broker tool to locate a broker closest to you.
Conveyancers will help you through the legal process of purchasing a home. With such a big, complex purchase you’ll likely need guidance to ensure you don’t make any costly errors. Conveyancers will represent you in the exchange of contracts and other legal matters to ensure everything goes as smoothly as possible.
4. Know what you can afford and seek pre-approval
Before you start, understand what you can afford. Take a look at the calculators available including stamp duty, how much can I borrow?, where can I buy? and mortgage repayment calculators to get a good picture of your finances.
Do your research and compare different loans/lenders before you make your decision too.
If you have your finances in order and think you are ready, consider getting a pre-approved loan. When it comes to negotiation, property sellers are often attracted to buyers who have pre-approved finance over those who don’t. This lets you head into the purchase process knowing the maximum amount you have to spend on the property, giving you the confidence to buy and a buffer to stop you going beyond your means.
From our collective experiences, there is nothing worse than not knowing if your finances will get approved after you’ve signed up to buy.
5. Do your inspections
Once you’ve found the property of your dreams, it’s a good idea to conduct building inspections. Professional inspections can provide insight into whether the property is worth buying. If it’s not, that simple inspection may save you a lot of pain and money in the long run.
What else do you think should be considered?